ECB cuts rates & introduces QE, Trump wants a trade deal: Aus shares rise for 3rd day, up 0.2% noon

Market Reports

by Jessica Amir

The Aussie share market rises for the third straight day. Rising at the open as expected after the European Central Bank (ECB) announced it would cut the central bank’s main deposit rate by 10 basis points (0.10 per cent) to -0.5 per cent, as the market expected. Plus, the bank also introduced € 20 billion per month asset purchase program, known as quantitative easing, or a bond buying program, with the European bank saying it would carry this out for as long as necessary.

Over the in US, President Donald Trump also said he would consider an interim trade deal but would prefer a full agreement. That came just a day after he said he would delay the $250 billion of tariffs on Chinese goods, from 1 October, to 15 October, ‘as a gesture of goodwill’ as the republic of China celebrates its 70th anniversary on 1 October.

On Wall Street, the Dow Jones notched its 7th day of straight gains, with US equities approaching record levels. The tech sector overnight gained the most, with the Nasdaq up 0.3 per cent, taking it to be 1.7 per cent off its record high.

As for our market, we are now 2.9 per cent away from our all-time high hit 30 July, with most of the ASX sectors rising before noon. Debt buying company, Credit Corp (ASX:CCP) shares hit a new all time high, $30.30 and explosive company, Orica (ASX:ORI) shares trade at multi year highs. 

The S&P/ASX 200 index is 0.2 per cent or 14 points up at 6,669. On the futures market the SPI is 27 points or 0.4 per cent higher/

Broker moves

Westpac (ASX:WBC) shares hit a new year high yesterday $29.97. Now it's at $29.71.Citi has marked Westpac (ASX:WBC) as a buy but citied it expects the big four bank’s final dividend to be cut by 10 per cent on announcing its FY19 result. The market is already expecting a cut of over 6 per cent. But Citi says it’s a ‘buy’ based on one, the strong dividend yield post-cut, two, it’s leverage to a stabilising property market, three, its restructured and rebased wealth management, as well as four, an undemanding valuation. Citi’s target price (TP) is $31.25.

Company news

Pilbara Minerals (ASX:PLS) aims to raise $20 million and through a share purchase plan (SPP), giving shareholders an opportunity to buy up to $30,000 new shares regardless of the number of shares they own. The SPP follows the $91.5 million placement and the formation of a strategic relationship with China’s largest battery manufacturer for electric vehicles (EVs), Contemporary Amperex Technology (Hong Kong) (CATL). Shares in Pilbara Minerals (ASX:PLS) are trading 0.7 per cent lower at $0.34 at noon.

Syrah Resources (ASX:SYR) reported its half year results to 30 June 2019 and its first interim report post commercial production (1 January 2019), from its Balama Graphite Operation project in Mozambique. It reported a loss of US$81.4 million, including a non-cash post tax impairment of property, plant and equipment and mining assets of US$65.9 million, and inventory write down of US$4.8 million. Its clocked revenue of US$46.9 million from sales of 101kt natural flake graphite. Shares in Syrah Resources Limited (ASX:SYR) are trading 7.7 per cent lower at $0.51 at noon.

Best and worst performers

The best-performing sector is S&P/ASX Industrials, adding 1.00 per cent, while the worst performing sector is S&P/ASX Info Tech, shedding 0.4 per cent.

The best performing stock in the S&P/ASX 200 is nib Holdings Limited (ASX:NHF), rising 3.1 per cent to $7.39, followed by shares in Nearmap (ASX:NEA) and Qantas Airways Limited (ASX:QAN).

The worst performing stock in the S&P/ASX 200 is Northern Star Resources Ltd (ASX:NST),dropping 4.1 per cent to $10.22, followed by shares in Pro Medicus Limited (ASX:PME) and Bravura Solutions (ASX:BVS).

Asian markets

Japan’s Nikkei has added 1 per cent, Hong Kong’s Hang Seng has gained 0.1 per cent and the Shanghai Composite is not trading.

Commodities and the dollar

Gold is trading at US$1,496 an ounce.
Iron ore price rose 4.9 per cent to US$99.30
Iron ore futures are pointing to a rise of 3.7 per cent.
One Australian dollar is buying 68.73 US cents.

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